Symbolic imageTech selloff spreads to Asia as investors hedge against AI bust
Japanese and Taiwanese stocks fell on Monday after Wall Street's tech rout, with Kioxia plunging on its demand outlook. Investors are buying put options and credit protection against an AI downturn.
Bloomberg reports that Japanese stocks fell on the tech selloff and on Kioxia's profit outlook, with the chipmaker's shares tumbling after guidance suggesting demand is leveling off. Bloomberg also reports that foreign investors made a record withdrawal from Taiwan stocks. A Wall Street Journal headline puts the Nikkei's fall at 0.9%, dragged by bank and tech shares. The moves follow Friday, 30 October, when the US tech selloff wiped out more than $1 trillion in market value, the Nasdaq 100 fell 3.4% and the S&P 500 dropped 1.8%, according to figures NBC News reported and the Jerusalem Post relayed.
Insurance against an AI bust
According to a Wall Street Journal report relayed by the Jerusalem Post, investors and tech executives are buying put options and credit-default swaps. The cost of insuring the debt of Amazon, Alphabet, Microsoft, Meta and Oracle rose over the past month to its highest since 2021, and CoreWeave put trading hit record levels in October. Jump Trading has begun offering contracts that protect against a collapse in computing prices. Many holders are seeking to protect gains, not betting on a crash, the report says.